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Thread: The problem with leveraged ETF's...

  1. #1

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    Default Re: Justbizness45's Account

    Video on leveraged ETFs from Coolhand's TSPTalk thread. Must watch if trading leveraged ETFs.


    http://www.tsptalk.com/mb/showthread.php?t=6317


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  3. #2

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    Default Re: Justbizness45's Account

    Quote Originally Posted by justbizness45 View Post
    Video on leveraged ETFs from Coolhand's TSPTalk thread. Must watch if trading leveraged ETFs.


    http://www.tsptalk.com/mb/showthread.php?t=6317

    This also from his thread.

    http://www.indexuniverse.com/section...y-returns.html

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  5. #3

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    Default Re: Justbizness45's Account

    Quote Originally Posted by justbizness45 View Post
    Video on leveraged ETFs from Coolhand's TSPTalk thread. Must watch if trading leveraged ETFs.


    http://www.tsptalk.com/mb/showthread.php?t=6317
    This should work better:

    http://www.youtube.com/watch?v=qEYW2CPWHYE

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  7. #4

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    Default Re: Justbizness45's Account


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  9. #5

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    Default Re: Justbizness45's Account

    Quote Originally Posted by justbizness45 View Post
    Thanks for spreading the news. I had heard the rumor this was coming but hadn't seen anything official until now.

    Lady
    If you think education is expensive, try ignorance. - Derek Bok

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  11. #6

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    Default Re: Justbizness45's Account

    Quote Originally Posted by justbizness45 View Post
    "If you were to assume that based on this cumulative return of the index, the bull fund would have experienced a 27% loss and the bear fund would've experienced a 27% gain, you would unfortunately be incorrect," wrote the company in the document. "In fact, for that time frame, the bull and bear funds returned -34.46% and 6.32%, respectively."

    So, does that mean we should be shorting the bull fund (FAS) rather than buying the bear (FAZ)?

    Actually, after listening to the videos about the daily compounding, it sounds like we should always be shorting the opposite fund with every trade during a volatile market. If you think financials are going down, short FAS. If you think they are going up, short the FAZ. At least until they change to monthly compounding.

    Is there a flaw in my thinking?
    -- Tom | My Trades

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  13. #7

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    Default Re: The problem with leveraged ETF's...


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  15. #8

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    Default Re: The problem with leveraged ETF's...


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  17. #9

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    Default Re: The problem with leveraged ETF's...

    Quote Originally Posted by justbizness45 View Post
    Tom, check this out:
    Very interesting. It's interesting that it was just posted the other day and we just came to the same conclusion on our own today.

    Sell them both short (long and short, as almost hedge) and they should both lose money, thus both the short positions make money in the long-term. Hmmm.
    -- Tom | My Trades


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  19. #10

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    Default Re: The problem with leveraged ETF's...

    Quote Originally Posted by etftalk View Post
    Very interesting. It's interesting that it was just posted the other day and we just came to the same conclusion on our own today.

    Sell them both short (long and short, as almost hedge) and they should both lose money, thus both the short positions make money in the long-term. Hmmm.
    You are kind of devious aren't you....

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